Allianz closes Proxy Revenue Swap for Invenergy's Upstream Wind Farm

Feb 7, 2018

  • 10-year Proxy Revenue Swap Hedge for Invenergy Upstream Wind Energy Center in Antelope County, Nebraska, US, ensures stable revenues despite uncertainty of intermittent wind resource

  • Allianz cooperates with Nephila and REsurety to provide innovative financing solution

New York/Chicago: Invenergy, North America’s largest privately held renewable energy company, has executed a 10-year Proxy Revenue Swap with Allianz Global Corporate & Specialty’s alternative risk transfer unit (“Allianz”) for its Upstream Wind Energy Center, protecting the new wind project’s revenues from the financial risks associated with future energy prices and the uncertain volume and timing of energy generation. The 202.5MW Upstream project, located in Antelope County, Nebraska, expects to complete construction and begin producing energy in the fourth quarter of 2018.

The Upstream transaction marks the fourth Proxy Revenue Swap to be executed since the innovative hedging product was launched in 2016, bringing the total of Proxy Revenue Swap-hedged wind project capacity to nearly 700MW. As with prior Proxy Revenue Swap transactions, Nephila Climate (“Nephila”) partnered with Allianz in managing the risks associated with the transaction. REsurety, Inc. (“REsurety”) provided the risk analytics used to support underwriting of the hedge prior to its close, and will serve as the calculation agent on an ongoing basis.

“At Invenergy, we apply innovative thinking to not just development, but also to financing of our clean energy projects. We’ve been considering the Proxy Revenue Swap structure since it came to market, and saw a great opportunity to apply this innovative new hedging structure to Upstream. De-risking our future revenues with this hedging structure was critical to securing the project’s financing,” said Jim Shield, EVP and Chief Commercial Officer at Invenergy.

Allianz’s Managing Director Karsten Berlage added: “Allianz was delighted to collaborate with the Invenergy team to help bring this project to fruition. The Upstream transaction serves as further confirmation of the value that wind projects see in the holistic revenue risk management enabled by the Proxy Revenue Swap product.”

As North America’s largest privately held renewable energy company, Invenergy and its affiliated companies develop, own, and operate large-scale renewable and other clean energy generation and storage facilities in the Americas and Europe.

Invenergy and its affiliated companies have developed more than 17,300 megawatts of projects that are in operation, construction or contracted, including wind, solar, natural gas-fueled power generation and energy storage projects.

Allianz Global Corporate & Specialty (AGCS) is the Allianz Group's dedicated carrier for corporate and specialty insurance business. AGCS provides insurance and risk consultancy across the whole spectrum of specialty, alternative risk transfer and corporate business.

Nephila is AGCS’s strategic partner in weather and climate-linked risk management and works in collaboration with the corporate and specialty insurer to manage the risk exposures of the Proxy Revenue Swap, as part of a larger investment portfolio which includes other weather and climate-linked risks across a range of industries from energy to agriculture. “We are very pleased to have executed this hedge to help Invenergy manage its revenue risk for the project, as further proof that the leaders in renewable development see real value in this structure” said Richard Oduntan, CEO at Nephila Climate.

REsurety, Inc. is the leader in hedge underwriting and settlement services for generation-linked risk management structures for the wind industry. “The uncertainty of the weather as a fuel is an ever-growing source of risk for the energy industry, and the Upstream transaction is a terrific example of how the market is responding to that challenge through the adoption of new risk management tools” said Lee Taylor, Co-Founder and CEO at REsurety.